Legal and Financial Issues

Barring some
treatment breakthrough, an Alzheimer's disease diagnosis means
that over time, affected individuals become increasingly less
able to manage their own legal and financial affairs. They need
to have others assume these responsibilities from them. But
that's easier said than done. Management of one's own legal and
financial affairs is a basic right of all competent adults, and
all 50 states and the District of Columbia have laws protecting
individuals from the seizure of these rights by others.
Fortunately, all 50 states and the District of Columbia also
recognize that in certain situations--Alzheimer's disease and
other dementias and brain injuries--people may become unable to
exercise competent control over their own legal and financial
affairs, and they allow control of a demented individual's legal
and financial affairs to pass to another person. In Alzheimer's
disease, this transition is never easy for either the affected
person or for the person who assumes legal and financial control.
Here's a brief guide to what people recently diagnosed with
Alzheimer's and their caregivers should know.

When to Plan the
Legal and Financial Transition

Ideally, the time
to plan is as soon as possible after the Alzheimer's diagnosis,
when affected individuals can still make legally competent
decisions for themselves, and know where their assets are
located. Of course, a diagnosis of Alzheimer's disease is very
upsetting, and in the immediate aftermath, planning for the
affected person's eventual legal and financial dependence on
another may not seem a high-priority task. But the sooner you and
the person with Alzheimer's tackle the legal and financial
aspects of the disease, the better. You can wait until the
affected individual is legally incompetent, but if you do,
finding the person's assets may be difficult or impossible, and
assuming control over the person's legal affairs becomes much
more problematic--and expensive.

Durable Powers
of Attorney

If you want to
give another person the right to make some legal or financial
decision for you--for example, signing a contract while you're
out of the country--you execute a legal document called a
"power of attorney." Power-of-attorney documents are
typically short-lived and very specific, empowering the person
you designate to act on your behalf only in a limited capacity.
However, if there is reason to believe that you might become
mentally incapacitated in the foreseeable future, all 50 states
and the District of Columbia allow legally competent adults to
execute legal documents called "durable powers of
attorney," which give the designated decision maker--known
as the "agent," or "attorney-in-fact"--broad
power over the affected individual's life, for example, the power
to place the person in a nursing home and use the person's assets
to pay for long-term care. Durable powers of attorney have
advantages and disadvantages: On the plus side, compared with
other ways to assume legal and financial authority over another,
durable powers of attorney are relatively inexpensive to execute
and do not require court action or court supervision. In
addition, because they bypass the courts, the affected
individual's financial affairs remain private and do not become a
matter of public record. On the minus side, durable powers of
attorney are not court supervised, so there is more potential for
abuse by the attorney-in-fact, which may be an issue in families
where loved one's disagree about what's best for the affected
person. Durable power of attorney documents may also include
specific instructions about how the affected individuals wants to
be cared for, and a "living will" outlining advanced
directives about end-of-life medical treatment. Most experts in
the legal aspects of Alzheimer's disease recommend durable powers
of attorney as the easiest, most efficient, and cheapest approach
to a caregiver's assumption of control of the affected
individual's legal and financial affairs. However, the person
creating the durable power of attorney document must be competent
at the time the durable power of attorney documents are signed,
so they must be drafted fairly soon after the Alzheimer's
diagnosis. Laws governing durable power of attorney agreements
vary from state to state. Software programs abound for creating
them, but they may not meet the specific requirements of your
state. Your best bet is to have an attorney experienced in elder
law draft your loved one's durable power of attorney, or review
any durable power of attorney you draft.

Conservatorships

If your loved one
becomes legally incompetent and has not executed a durable power
of attorney, in order to assume control over the person's legal
and financial affairs, you need a court's permission in the form
of a "conservatorship." You become the
"conservator" and your loved one becomes the
"conservatee." Anyone--a spouse, relative, or
friend--may petition the court to appoint a conservator for an
individual who appears to be incompetent. Once a conservatorship
petition is filed, the court assigns an investigator to assess
the proposed conservatee's competence, and interview any
individuals who may have an interest in the conservatorship--the
proposed conservator and other family members--to assess the
situation. The next step is a hearing, where the investigator
reports back to court, and a judge decides whether to grant the
conservatorship. If the court grants conservatorship, the judge
appoints the conservator, and specifies the conservator's powers
and reporting responsibilities to the court. Conservatorships
have advantages and disadvantages: On the plus side, they are
court supervised, so there is less potential for abuse by the
conservator than there is in durable power of attorney
arrangements where the attorney-in-fact is neither
court-appointed nor court-supervised. A conservatorship might be
a good approach in a situation where family members are in
conflict and cannot agree on how to care for the affected
individual and deal with the person's assets. On the minus side,
conservatorships can be very expensive to establish because the
process requires considerable court and investigator time, and
family members may want to hire attorneys to represent their
views. Laws governing conservatorships vary from state to state.
Software programs may help you petition for a conservatorship,
but they may not meet the specific requirements of your state.
Your best bet is to have an attorney experienced in elder law
work with you to establish a conservatorship over your loved one
with Alzheimer's disease.

How to Find a
Good Attorney

Only a small
proportion of attorneys are familiar with the range of issues now
increasingly called "elder law." These issues include:

Execution of durable powers of attorney.

Managing the
process to obtain conservatorships.

Dealing with Social
Security, Medicare, Medicaid, and long-term-care insurance.

Tax and estate issues.

Nursing home issues.

The best
way to find an attorney familiar with elder law is by
word-of-mouth through contacts in the Alzheimer's community: your
local Alzheimer's Association organization, or your Alzheimer's
support group. In addition, other organizations in your area that
deal with the elderly may be a good resource. Finally, you may be
able to obtain useful information from the National Academy of
Elder Law Attorneys, 1604 North Country Club Rd., Tucson, AZ
85716; (520) 881-4005; www.primenet.com/elderlaw

How to Find the
Affected Person's Assets

The sooner you assemble the affected persons assets, the better. In the early
stages of the disease, the person may still recall where
financial documents are located. As the disease progresses,
people forget where their financial information is located, and
you may have considerable difficulty assembling it. Financial
items include: Cash Jewelry. Collectibles: art, coins, stamps,
antiques, etc. Other valuables: cameras, furnishings, items in
storage, etc. Bank account records. Pension and Social Security
documents. Insurance policies. Safe deposit box keys. Stock,
bond, partnership, and mutual fund ownership paperwork. Real
estate deeds. A will. Inheritance documents. Cemetery plot
documents. And any other business or financial assets. If the
person does not recall where all pertinent financial records are
located, then you're faced with finding them. The rule of thumb
is: Debts find you, but you must locate assets. To find most
financial assets, look for paperwork or notices that arrive
through the mail: bank statements, brokerage statements,
investment reports, interest and dividend checks, tax
information, notices that rent is due on safe deposit boxes or
storage units, notices that taxes are due on real estate. Banks
usually do not release information about customers, but if your
loved one has banked at the same institution for many years and
the staff there know your loved one and you, they may bend the
rules a bit and reveal all of the person's accounts, investments,
and safe deposit box information. To find cash, collectibles,
jewelry, and other real goods, look around. Check desks, closets,
under beds, in garages, etc. Most people do not hide valuables
all that securely, but if you have reason to suspect that your
loved one has valuable well hidden, do a more thorough search:
Look through books for hidden compartments made by cutting out
the center of pages. Look in the pockets of old clothing in
closets. Check for cuts in furniture linings that might lead to
caches. Finally, when packing up a loved one's home, do it
slowly, and examine every item. Then examine the empty home for
loose floorboards, or other places valuables might be hidden.